45% of firms fail to manage supply chain risks

Some 45% of organisations are failing to assess and manage risks in their supply chain, according to research by Aon and State of Flux.

In the ‘Risks in 21st Century Supply Chains’ report Aon and State of Flux said ‘laggers’ among international blue chip companies could face supply chain disruption in 2008.

Aon said as supply of grain diverts from existing customers to the highest bidder, namely China, customers will need to arrange multiple sources and work on scenario planning around the failure of the supply chain.

The survey results indicate that not enough is being done to tackle supply chain risks. Key findings include:

Only 27% stated that managing supply chain risk is a priority area of focus for 2008;

“Only 27% stated that managing supply chain risk is a priority area of focus for 2008;

Some 55% of organisations believe they are currently managing and assessing risk in their supply chains;

Only 43% of respondents stated that their supply chain and risk management functions work partially together to manage risk;

The top 3 strategies for responding to supply chain disruption are dual sourcing, risk acceptance and shared plans with suppliers - but 14% have no strategy;

The majority of the respondents (53%) use an internal function as the principal source of intelligence on inherent risk in the supply chain. The media is used by 10% of respondents.